Adidas 1998 Annual Report Download - page 17

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Management Discussion and Analysis 15
UPTURN IN SALES Mavic increased sales in 1998 in all regions and product
groups by a total of 28% to DM 102 million. This sales growth was driven by the Wheels
category which grew 61% to DM 48 million, which represents around half of total net
sales. Rims accounted for DM 51 million, 9% up compared to 1997.
In terms of regional performance, growth was led by Europe with an increase of 31%
to DM 81 million, followed by North America where sales increased 21% to DM 19 million.
The engine of growth was the quality of the innovative products coupled with the suc-
cesses and popularity of promotional partners such as top racing teams Crédit Agricole
and Post Swiss.
POSITIVE OPERATING RESULT
Mavic contributed to the success of the group
in 1998, achieving a positive operating result for the first time since 1995. While gross
margin declined
slightly to 35% of net sales, the operating result improved by well over
DM 4 million to DM 1 million due to a stable level of operating expenses.
EXPANSION OF PRODUCT RANGE EXPECTED TO BOOST SALES
In fall 1998 Mavic launched a new product: an electronic gear shift. This was hailed by
experts as the most outstanding innovation of the season in the cycle component sector.
Led by the new product, Mavic expects to increase sales further in 1999.
MAVIC
FOR THE FIRST TIME SINCE 1995 MAVIC PASSED THE BREAK-EVEN POINT IN ITS OPERATING RESULT.
STRONG SALES GROWTH HAS LED TO ECONOMIES OF SCALE. AN EXPANDED PRODUCT RANGE IS
EXPECTED TO SUPPORT CONTINUED GROWTH IN THE FUTURE.
Net sales 1998, split by region
Americas Europe Asia
18.6% 79.1% 2.3%
MAVIC
MAVIC
Net sales 1998, split by products, in %
Components 4.1
Wheels 46.6
Rims 49.3
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